China wants to sell cars to the world. As the country's industry moves up the value chain, the next stop it wants to make is electric automobile exports. Jacky Wong reports in The Wall Street Journal: Chinese electric vehicles are speeding ahead in the country in 2021. Next they may want to make inroads overseas. Sales of new-energy passenger vehicles in China, including plug-in hybrids, have nearly tripled from a year earlier in the first 11 months of 2021, according to the China Association of Automobile Manufacturers. And that is against the backdrop of a sluggish overall car market. … [Read more...]
FOOL ME ONCE: Nissan Wary of EV Projections
In 2010, Nissan took a big leap of faith into the electric vehicle market, spending billions on designing and building battery-powered cars. It didn't turn out as planned, and now the company is wary of projections of growth for the electric vehicle market. Sean McLain reports in The Wall Street Journal: TOKYO— Nissan Motor Co. was once the world’s loudest proponent of electric cars, but these days it is one of the more sober voices. On Monday, the Japanese car maker said it would spend about $17.5 billion on 20 new battery-powered models, aiming to have half its sales come from electric … [Read more...]
ELECTRIC VEHICLE EUPHORIA: “Flow, Momentum, Memes and Appetites”
In an interview with The Financial Times, Drew Dickson, chief investment officer at Albert Bridge Capital, explains that in the short and intermediate term, electric vehicle stocks have been dominated not by fundamentals, but by "flow, momentum, memes, and appetites." Robin Wigglesworth reports on the increasing power of electric vehicle makers' over financial markets, writing: An index of EV and electric battery companies compiled by the FT has a combined market capitalisation of almost $1.8tn. In contrast, automotive giants Toyota, Volkswagen and Hyundai, the biggest car manufacturers in … [Read more...]
BIGGER THAN FORD? Rivian’s IPO Valuation of Over $100B
Should Rivian, a company with almost no revenue, and barely any product sold, be valued at $100 billion (fully diluted)? The company claims to produce electric vehicles but hasn't produced that many. Should it be valued more than Ford, and about the same as GM? Ben Foldy reports in The Wall Street Journal: Rivian Automotive Inc. RIVN +20.21% made its debut on the public markets Wednesday, scoring a valuation that instantly made it a rival of traditional car makers and the latest beneficiary of investors’ fervor for greener auto technologies. The California-based startup, founded in 2009 by … [Read more...]
How Many Trillion Dollar Electric Car Companies Can Investors Produce?
Electric vehicle manufacturer, Rivian, is planning an IPO. Despite producing nearly a billion dollars in losses in the first half of 2021, the company, which has few customers, may be valued at nearly $53 billion when shares go public. That's more than many established, profitable, automotive manufacturers. How big is the appetite of investors for electric vehicle manufacturers that don't make a lot of (or any) money? Dave Lee and Miles Kruppa report in the Financial Times: Rivian, the electric automotive company backed by Amazon, is targeting a valuation as high as $53bn when it makes its … [Read more...]
Even DEBUNKED Rumors Add Billions to Tesla Market Cap
Tesla gained "an Exxon," or about $260 billion in market capitalization even after rumors of an agreement with Hertz were debunked by CEO Elon Musk. Bloomberg's Liam Denning writes: For automakers, fleet sales used to be like the free newspapers lying around hotel lobbies. You shifted product, yes, but not in a way any half-sentient investor would value. As with so much else, Elon Musk has apparently changed all that. Shares of car rental giants Hertz Global Holdings Inc. and, especially, Avis Budget Group Inc. have soared this past week or so on news that they are buying a lot of … [Read more...]
TESLA OPTIONS: “One of the Biggest Casinos on Wall Street”
Rampant speculation in Tesla options has driven their trading activity to surpass that of actual shares. Gunjan Banerji calls the trade of Tesla options "one of the biggest casinos on Wall Street." He writes in The Wall Street Journal: Traders are swarming the market for Tesla Inc. options to bet on a continued stock rally. Roughly one of every two dollars traders spent in the U.S.-listed options market on Monday and Tuesday went to Tesla options, according to Cboe Global Markets CBOE -0.05% data. On Monday, traders spent more money on Tesla bets, in what’s known as options premium, than … [Read more...]
GROSS MISCALCULATION? New Rivals Threaten Tesla’s Success
Analysts are boasting about Tesla's strong gross margins, but are they sustainable? With seemingly every major automaker and other major manufacturers like Foxconn, and untold numbers of startups getting into the electric vehicle business, how long can Tesla maintain its dominance in the market? In the long-run, are Tesla's high margins possible in a business with such low barriers to entry? Rebecca Elliott reports in The Wall Street Journal: Tesla Inc. TSLA +2.91% notched a third consecutive record quarterly profit, thanks in part to the electric-vehicle maker’s ability to navigate … [Read more...]
MAJOR NEW POLLUTION SOURCE: Electric Vehicles Are Dirtier Than You Think
Despite being touted as a clean energy alternative to gasoline or diesel powered vehicles, Jurica Dujmovic describes electric vehicles as "poised to be one of the biggest new sources of pollution." He writes in MarketWatch: The International Energy Agency (IEA) said this year it’s expecting 145 million electric vehicles (EVs) worldwide by 2030. If governments ramp up efforts to meet international energy and climate goals, the number could soar even higher — up to 230 million — and that’s not counting two- and three-wheel vehicles. That’s a lot of new cars to hit global markets. Also … a … [Read more...]
BATTERY BATTLE BEGINS: Toyota Takes on Tesla
Toyota, a pioneer in electric vehicle technology, has announced it will invest $13.6 billion in battery development over the next decade to remain on the cutting edge. Kana Inagaki reports in The Financial Times: Toyota will invest ¥1.5tn ($13.6bn) in battery development and supply over the next decade as the world’s largest carmaker aims to stay ahead in the race for cheaper and longer-lasting electric and hybrid vehicles. The Japanese group outlined its plans as it attempted to quell criticism it had been slow to shift to electric cars because of its dominance in hybrid vehicles that use … [Read more...]
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